Yunqi Capital opposes STAAR Surgical merger despite Alcon's raised bid

Yunqi Capital Limited, which holds a 5.1% stake in STAAR Surgical Company (NASDAQ: STAA), said it will continue to vote against the proposed acquisition by Alcon Inc. (SIX/NYSE: ALC) despite Alcon's revised offer of $30.75 per share, up from the original $28 per share.

The Hong Kong-based investment firm released a letter to shareholders stating it believes STAAR's 30-day go-shop process was structured to favor the Alcon deal rather than maximize shareholder value. Yunqi Capital maintains that STAAR should not be sold at this time, citing the company's position at what it calls a strategic inflection point.

According to Yunqi Capital, STAAR contacted 21 third parties during the go-shop period, but only two signed non-disclosure agreements. The firm criticized the process structure, noting that Alcon retained rights to review any superior proposal for four business days after the go-shop period ended and would receive all non-public information provided to potential bidders within one business day.

Yunqi Capital founder and Chief Investment Officer Christopher Wang stated that excess distributor inventory pressuring results since 2023 is normalizing and demand indicators in China's refractive market have begun improving. The firm pointed to STAAR's recent quarterly results as evidence of sequential operational momentum.

The investment firm rejected Alcon's characterization of the revised offer as providing a "generous" premium, despite the 74% premium to STAAR's 90-day volume-weighted average price. Yunqi Capital argued that business cycles affecting the company last substantially longer than 90 days and that recent challenges reflect temporary headwinds rather than structural weaknesses.

Yunqi Capital manages over $250 million in assets and deploys a fundamental long-short equity strategy focused primarily on companies with China connections.

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